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                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

      THIS AGREEMENT is entered into as of June 29, 2004, by and between THE
SPORTMAN'S GUIDE, INC., a Minnesota corporation ("Borrower"), and WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

      Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

      NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower hereby agree as follows:

                                    ARTICLE I
                                  CREDIT TERMS

      SECTION 1.1. LINE OF CREDIT.

      (a)   Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including September 30, 2007, not to exceed at any time the aggregate
principal amount of Fifteen Million Dollars ($15,000,000.00) ("Line of Credit"),
the proceeds of which shall be used for working capital and to allow for standby
letters of credit. Borrower's obligation to repay advances under the Line of
Credit shall be evidenced by a promissory note dated June 29, 2004 ("Line of
Credit Note"), all terms of which are incorporated herein by this reference.

      (b)   Limitation on Borrowings. At any time when combined outstanding
borrowings under the Line of Credit and Term Loan exceed $20,000,000.00, the
outstanding borrowings under the Line of Credit, to a maximum of the principal
amount set forth above, shall not at any time exceed an aggregate of Seventy
Five percent (75%) of Borrower's eligible accounts receivable, plus Fifty
percent (50%) of the value of Borrower's eligible inventory and eligible
inventory of The Golf Warehouse, Inc. (exclusive of work in process and
inventory which is obsolete, unsaleable or damaged), with value defined as the
lower of cost or market value. All of the foregoing shall be determined by Bank
upon receipt and review of all collateral reports required hereunder and such
other documents and collateral information as Bank may from time to time
require. Borrower acknowledges that said borrowing base was established by Bank
with the understanding that, among other items, the aggregate of all returns,
rebates, discounts, credits and allowances for the immediately preceding three
(3) months at all times shall be less than ten percent (10%) of Borrower's gross
sales for said period. If such dilution of Borrower's accounts for the
immediately preceding three (3) months at any time exceeds ten percent (10%) of
Borrower's gross sales for said period, or if there at any time exists any other
matters, events, conditions or contingencies which Bank reasonably believes may
affect payment of any portion of Borrower's accounts, Bank, in its sole
discretion, may reduce the foregoing advance rate against eligible accounts
receivable to a percentage appropriate to reflect such additional dilution
and/or establish additional reserves against Borrower's eligible accounts
receivable.

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      As used herein, "eligible accounts receivable" shall consist solely of
trade accounts created in the ordinary course of Borrower's business, upon which
Borrower's right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever, and in which Bank has a perfected
security interest of first priority, and shall not include:

            (i)   any account which is past due more than twice Borrower's
      standard selling terms;

            (ii)  that portion of any account for which there exists any right
      of setoff, defense or discount (except regular discounts allowed in the
      ordinary course of business to promote prompt payment) or for which any
      defense or counterclaim has been asserted;

            (iii) any account which represents an obligation of any state or
      municipal government or of the United States government or any political
      subdivision thereof (except accounts which represent obligations of the
      United States government and for which the assignment provisions of the
      Federal Assignment of Claims Act, as amended or recodified from time to
      time, have been complied with to Bank's satisfaction);

            (iv)  any account which represents an obligation of an account
      debtor located in a foreign country;

            (v)   any account which arises from the sale or lease to or
      performance of services for, or represents an obligation of, an employee,
      affiliate, partner, member, parent or subsidiary of Borrower;

            (vi)  that portion of any account, which represents interim or
      progress billings or retention rights on the part of the account debtor;

            (vii) any account which represents an obligation of any account
      debtor when twenty percent (20%) or more of Borrower's accounts from such
      account debtor are not eligible pursuant to (i) above;

            (viii) that portion of any account from an account debtor which
      represents the amount by which Borrower's total accounts from said account
      debtor exceeds twenty-five percent (25%) of Borrower's total accounts;

            (ix)  any account deemed ineligible by Bank when Bank, in its sole
      discretion, deems the creditworthiness or financial condition of the
      account debtor, or the industry in which the account debtor is engaged, to
      be unsatisfactory.

As used herein, the term "Eligible Inventory" shall mean all of Borrower's
inventory valued at cost, as reduced by an Eligible Inventory Reserve. "Eligible
Inventory Reserve" means the sum of: (a) for inventory that has been held for
one year or more but less than two years, 25% of cost for such inventory, plus
(b) for inventory that has been held for two years or more, 50% of the cost of
such inventory, plus (c) for The Sportsman's Guide Outlet, Inc., the greater of
five percent (5.0%) of its inventory or the actual "shrink reserve" for The
Sportsman's Guide Outlet, Inc. The parties expressly acknowledge and agree that
Eligible Inventory shall include any inventory acquired with the support of a
letter of credit, whether or not such inventory is in transit.

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      (c)   Letter of Credit Subfeature. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue or cause
an affiliate to issue Standby letters of credit for the account of Borrower
(each, a "Letter of Credit" and collectively, "Letters of Credit"); provided
however, that the aggregate undrawn amount of all outstanding Letters of Credit
shall not at any time exceed Ten Million Dollars ($10,000,000.00). The form and
substance of each Letter of Credit shall be subject to approval by Bank, in its
sole discretion. No Letter of Credit shall have an expiration date subsequent to
the maturity date of the Line of Credit. The undrawn amount of all Letters of
Credit shall be reserved under the Line of Credit and shall not be available for
borrowings thereunder. Each Letter of Credit shall be subject to the additional
terms and conditions of the Letter of Credit agreements, applications and any
related documents required by Bank in connection with the issuance thereof. Each
drawing paid under a Letter of Credit shall be deemed an advance under the Line
of Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any drawing is paid, then Borrower shall immediately pay to Bank the full
amount drawn, together with interest thereon from the date such drawing is paid
to the date such amount is fully repaid by Borrower, at the rate of interest
applicable to advances under the Line of Credit. In such event Borrower agrees
that Bank, in its sole discretion, may debit any account maintained by Borrower
with Bank for the amount of any such drawing.

      (d)   Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

      SECTION 1.2. TERM LOAN.

      (a)   Term Loan. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make a loan to Borrower in the principal amount of Twelve
Million Five Hundred Thousand Dollars ($12,500,000.00) ("Term Loan"), the
proceeds of which shall be used to finance the acquisition of other business
operations. Borrower's obligation to repay the Term Loan shall be evidenced by a
promissory note dated as of June 29, 2004 ("Term Note"), all terms of which are
incorporated herein by this reference. Bank's commitment to grant the Term Loan
shall terminate on July 21, 2004.

      (b)   Repayment. Principal and interest on the Term Loan shall be repaid
in accordance with the provisions of the Term Note.

      (c)   Prepayment. Borrower may prepay principal on the Term Loan solely in
accordance with the provisions of the Term Note.

      SECTION 1.3. INTEREST/FEES.

      (a)   Interest. The outstanding principal balance of each credit subject
hereto shall bear interest, and the amount of each drawing paid under the
Standby Letter of Credit paid to the date such amount is fully repaid by
Borrower, at the rate of interest set forth in each promissory note or other
instrument or document executed in connection therewith.

                                      -3-
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      (b)   Computation and Payment. Interest shall be computed on the basis of
a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

      (c)   Commitment Fee. Borrower shall pay to Bank an annual non-refundable
commitment fee for the Line of Credit equal to Eighteen Thousand Seven Hundred
Fifty Dollars ($18,750.00), which fee shall be due and payable annually in
advance, commencing August 31, 2004.

      (d)   Commitment Fee. Borrower shall pay to Bank a non-refundable
commitment fee for the Term Loan equal to Thirty Thousand Dollars ($30,000.00),
which fee shall be due and payable in full as of the date of this Agreement.

      (e)   Unused Commitment Fee. Borrower shall pay to Bank a fee equal to
(.250%) per annum (computed on the basis of a 360-day year, actual days elapsed)
on the average daily unused amount of the Line of Credit, which fee shall be
calculated on a quarterly basis by Bank and shall be due and payable by Borrower
in arrears within ten (10) days after each billing is sent by Bank.

      (f)   Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to (1.25%) per annum (computed on the
basis of a 360-day year, actual days elapsed) of the face amount thereof, and
(ii) fees upon the payment or negotiation of each drawing under any Letter of
Credit and fees upon the occurrence of any other activity with respect to any
Letter of Credit (including without limitation, the transfer, amendment or
cancellation of any Letter of Credit) determined in accordance with Bank's
standard fees and charges then in effect for such activity.

      (g)   Termination Fee. If the Line of Credit is terminated prior to
September 30, 2005 (other than through a refinancing with an affiliate of the
Bank), a termination fee of 1% of the maximum amount of the Line of Credit will
be payable to the Bank.

      SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all principal, interest and fees due under each credit subject hereto by
charging Borrower's deposit account number 6355031049 with Bank, or any other
deposit account maintained by Borrower with Bank, for the full amount thereof.
Should there be insufficient funds in any such deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.

      SECTION 1.4. COLLATERAL.

      As security for all indebtedness of Borrower to Bank subject hereto,
Borrower hereby grants to Bank security interests of first priority in all
Borrower's accounts receivable and other rights to payment, general intangibles,
inventory and equipment.

As security for all indebtedness of Borrower to Bank subject hereto, Borrower
shall cause The Golf Warehouse, Inc. to grant to Bank security interests of
first priority in all accounts receivable and other rights to payment, general
intangibles, inventory and equipment.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon

                                      -4-
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demand for all costs and expenses incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees and
costs of appraisals, audits and title insurance.

      SECTION 1.5. BANKING RELATIONSHIP. The Borrower's primary operating
accounts shall be maintained at the Bank or one of its affiliates.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

      Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

      SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the State of Minnesota, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.

      SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.

      SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

      SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.

      SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement
of Borrower dated March 31, 2004, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or as otherwise permitted by Bank in writing.

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      SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.

      SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.

      SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law.

      SECTION 2.9. ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

      SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

                                   ARTICLE III
                                   CONDITIONS

      SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

      (a)   Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

      (b)   Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

      (i)   This Agreement and each promissory note or other instrument or
            document required hereby.
      (ii)  Certificate of Incumbency (2).
      (iii) Corporate Resolution: Borrowing.
      (iv)  Corporate Resolution: Third Party Pledgor.
      (v)   Security Agreement: Continuing Rights to Payment & Inventory.
      (vi)  Security Agreement: Equipment.
      (vii) Security Agreement Third Party: Rights to Payment & Inventory.
      (viii) Security Agreement Third Party: Equipment.

                                      -6-
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      (ix)  UCC Financing Statement.
      (vii) Such other documents as Bank may require under any other Section of
            this Agreement.

      (c)   Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower.

      (d)   Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all Borrower's property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank.

      (e)   Acquisition. The acquisition of The Golf Warehouse by Borrower shall
have been completed prior to the initial funding of the Term Loan.

      SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:

      (a)   Compliance. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

      (b)   Documentation. Bank shall have received all additional documents
which may be required in connection with such extension of credit.

                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

      Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

      SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein, and immediately upon demand by Bank,
the amount by which the outstanding principal balance of any credit subject
hereto at any time exceeds any limitation on borrowings applicable thereto.

      SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower.

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      SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail satisfactory to Bank:

      (a)   not later than 120 days after and as of the end of each fiscal year,
an audited consolidated financial statement of Borrower, prepared by Certified
Public Accountant, to include balance sheet, income statement, statement of cash
flow and management letter including management's discussion and analysis (if
any);

      (b)   not later than 45 days after and as of the end of each quarter, a
consolidated financial statement of Borrower, prepared by Borrower, to include
balance sheet and income statement;

      (c)   not later than 45 days after and as of the end of each month in
which the aggregate outstanding amount under the Line of Credit and Term Loan
exceed $20,000,00.00, a borrowing base certificate, and an inventory collateral
report;

      (d)   contemporaneously with each annual and quarterly financial statement
of Borrower required hereby, a certificate of the president or chief financial
officer of Borrower that said financial statements are accurate and that there
exists no Event of Default nor any condition, act or event which with the giving
of notice or the passage of time or both would constitute an Event of Default;

      (e)   An annual collateral audit will be required if aggregate outstanding
amounts under the Line of Credit and Term Loan exceed $20,000,000.00 for a 360
day period. Borrower will be responsible for reimbursing the Bank for the cost
of such collateral audit;

      (f)   from time to time such other information as Bank may reasonably
request.

      SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.

      SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth all
insurance then in effect.

      SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.

      SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide

                                      -8-
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dispute may arise, and (b) for which Borrower has made provision, to Bank's
satisfaction, for eventual payment thereof in the event Borrower is obligated to
make such payment.

      SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower.

      SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial condition
as follows using generally accepted accounting principles consistently applied
and used consistently with prior practices (except to the extent modified by the
definitions herein):

Covenants (a) through (d) to apply only if the Term Loan has been repaid in
full:

      (a)   Current Ratio not at any time less than 1.0 to 1.0, with "Current
Ratio" defined as total current assets divided by total current liabilities.

      (b)   Tangible Net Worth not at any time less than $17,300,000.00, with
such amount to increase by 50% of Borrower's positive net income for each
quarter thereafter, with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt less any intangible assets. The
parties expressly acknowledge and agree that prepaid expenses, excluding,
without limitation, prepaid advertising, shall not be deemed to be intangible
assets.

      (c)   Total Liabilities divided by Tangible Net Worth not at any time
greater than 3.50 to 1.0, with "Total Liabilities" defined as the aggregate of
current liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" as defined above.

      (d)   Net income after taxes not less than $1,000,000.00 on an annual
basis, determined as of each fiscal year end, and be profitable year to date as
of each June 30.

Covenants (e) and (f) to apply only while the Term Loan remains outstanding:

      (e)   Funded Debt to EBITDA ratio of less than or equal to 2.25 to 1.0 at
all times through March 31, 2005 and 2.0 to 1.0 at all times thereafter measured
at each fiscal quarter end on a trailing 12 month basis, with "Funded Debt"
defined as the sum of all obligations for borrowed money (including subordinated
debt) plus all capital lease obligations, and with "EBITDA" defined as net
profit before tax plus interest expense (net of capitalized interest expense),
depreciation expense and amortization expense, when an outstanding balance
exists on the term loan.

      (f)   Fixed Charge Coverage Ratio of 1.50 to 1.0 or more measured at each
quarter end on a trailing 12-month basis with "Fixed Charge Coverage Ratio"
defined as: EBITDAR less the sum of unfinanced capex, dividends, redemptions and
distributions and taxes paid in cash divided by the sum of current maturities of
long term debt, interest expense and rent expense, with "EBITDAR" defined as net
income plus interest expense, depreciation expense, amortization expense and
rent expense minus capital expenditures and distributions divided by current
maturities of long term and debt and current maturities of capital leases plus
interest expense and rental expense, when an outstanding balance exists on the
term loan.

      SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five (5)
days after the occurrence of each such event or matter) give written notice to
Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of

                                      -9-
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any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property.

                                    ARTICLE V
                               NEGATIVE COVENANTS

      Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

      SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

      SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed
assets in any fiscal year in excess of an aggregate of $1,750,000.00.

      SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any
fiscal year in excess of an aggregate of $500,000.00.

      SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank, and (b) any
other liabilities of Borrower existing as of, and disclosed to Bank prior to,
the date hereof; provided that Borrower shall be permitted to grant purchase
money security interest relating to the acquisition of machinery and equipment
to the extent permitted under Section 5.2 above.

      SECTION 5.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity for a purchase price in
excess of One Million Dollars; nor sell, lease, transfer or otherwise dispose of
all or a substantial or material portion of Borrower's assets except in the
ordinary curse of business.

      SECTION 5.6. GUARANTIES. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank.

      SECTION 5.7. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to
or investments in any person or entity, except any of the foregoing existing as
of, and disclosed to Bank prior to, the date hereof.

                                      -10-
<PAGE>

      SECTION 5.8. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower's stock now
or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire
any shares of any class of Borrower's stock now or hereafter outstanding without
the prior written consent of Bank. Notwithstanding the foregoing, Bank hereby
expressly acknowledges and agrees that Borrower shall be permitted to continue
to repurchase up to 10% of its common stock through May 31, 2005.

      SECTION 5.9. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist
a security interest in, or lien upon, all or any portion of Borrower's assets
now owned or hereafter acquired, except any of the foregoing in favor of Bank or
which is existing as of, and disclosed to Bank in writing prior to, the date
hereof and except for purchase money security interests relating to the
acquisition of machinery and equipment to the extent permitted under Section 5.2
above.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

      SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

      (a)   Borrower shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents.

      (b)   Any financial statement or certificate furnished to Bank in
connection with, or any representation or warranty made by Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.

      (c)   Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of twenty (20) days from its occurrence.

      (d)   Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower, any guarantor
hereunder or any general partner or joint venturer in any Borrower which is a
partnership or joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a "Third Party Obligor") has incurred any
debt or other liability to any person or entity, including Bank.

      (e)   The filing of a notice of judgment lien against Borrower or any
Third Party Obligor; or the recording of any abstract of judgment against
Borrower or any Third Party Obligor in any county in which Borrower or such
Third Party Obligor has an interest in real property; or the service of a notice
of levy and/or of a writ of attachment or execution, or other like process,
against the assets of Borrower or any Third Party Obligor; or the entry of a
judgment against Borrower or any Third Party Obligor in excess of $50,000.00.

      (f)   Borrower or any Third Party Obligor shall become insolvent, or shall
suffer or consent to or apply for the appointment of a receiver, trustee,
custodian or liquidator of itself or any of its property, or shall generally
fail to pay its debts as they become due, or shall make a

                                      -11-
<PAGE>

general assignment for the benefit of creditors; Borrower or any Third Party
Obligor shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower or any Third Party Obligor, or Borrower or any Third Party Obligor
shall file an answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition; or Borrower or any Third Party Obligor
shall be adjudicated a bankrupt, or an order for relief shall be entered against
Borrower or any Third Party Obligor by any court of competent jurisdiction under
the Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors.

      (g)   There shall exist or occur any event or condition which Bank in good
faith believes impairs, or is substantially likely to impair, the prospect of
payment or performance by Borrower of its obligations under any of the Loan
Documents.

      (h)   The death or incapacity of any individual Borrower or Third Party
Obligor. The dissolution or liquidation of any Borrower or Third Party Obligor
which is a corporation, partnership, joint venture or other type of entity; or
Borrower or any such Third Party Obligor, or any of its directors, stockholders
or members, shall take action seeking to effect the dissolution or liquidation
of such Borrower or Third Party Obligor.

      (i)   Any change in ownership of an aggregate of twenty-five percent (25%)
or more of the common stock of Borrower.

      SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.

                                   ARTICLE VII
                                  MISCELLANEOUS

      SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

                                      -12-
<PAGE>

      SECTION 7.2. NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

      BORROWER:       THE SPORTMAN'S GUIDE, INC.
                      411 Farwell Avenue
                      South St. Paul, Minnesota 55075

      BANK:           WELLS FARGO BANK, NATIONAL ASSOCIATION
                      430 North Wabasha Street, Suite 302
                      St. Paul, Minnesota 55101

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

      SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents, Bank's continued administration hereof
and thereof, and the preparation of any amendments and waivers hereto and
thereto, (b) the enforcement of Bank's rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

      SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

      SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

                                      -13-
<PAGE>

      SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

      SECTION 7.7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

      SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

      SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

      SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.

      SECTION 7.11. ARBITRATION.

      (a)   Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

      (b)   Governing Rules. Any arbitration proceeding will (i) proceed in a
location in Minnesota selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. Section 91 or
any similar applicable state law.

      (c)   No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property

                                      -14-
<PAGE>

collateral; (ii) exercise self-help remedies relating to collateral or proceeds
of collateral such as setoff or repossession; or (iii) obtain provisional or
ancillary remedies such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency of any
arbitration proceeding. This exclusion does not constitute a waiver of the right
or obligation of any party to submit any dispute to arbitration or reference
hereunder, including those arising from the exercise of the actions detailed in
sections (i), (ii) and (iii) of this paragraph.

      (d)   Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Minnesota or a neutral retired judge of the
state or federal judiciary of Minnesota, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Minnesota and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Minnesota Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

      (e)   Discovery. In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the dispute being arbitrated and must be completed
no later than 20 days before the hearing date and within 180 days of the filing
of the dispute with the AAA. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject to final determination by
the arbitrator upon a showing that the request for discovery is essential for
the party's presentation and that no alternative means for obtaining information
is available.

      (f)   Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

      (g)   Payment Of Arbitration Costs And Fees. The arbitrator shall award
all costs and expenses of the arbitration proceeding.

      (h)   Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding

                                      -15-
<PAGE>

may disclose the existence, content or results thereof, except for disclosures
of information by a party required in the ordinary course of its business or by
applicable law or regulation. If more than one agreement for arbitration by or
between the parties potentially applies to a dispute, the arbitration provision
most directly related to the Loan Documents or the subject matter of the dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.

                                                     WELLS FARGO BANK,
THE SPORTMAN'S GUIDE, INC.                           NATIONAL ASSOCIATION

By: /s/ Charles Lingen                             By: /s/ Thomas G. Skalitzky
    ---------------------------                        -------------------------

Title: CFO                                         Title: Vice President

                                      -16-